how do you know? >> here is one of the reasons. i will take south san francisco. south san francisco has rezoned everything east of 101 for biotech. you cannot have that use. they have squeezed what little industrial property is left, users, into the west side of the freeway. i'm completing a deal right now on two acres with about 17,000 feet of building in south san francisco. south san francisco wants everything to be biotech. we are shrinking the pool of uses. both in san francisco and the peninsula. >> let me just ask this question. have you done an inventory of every single property that could fit the needs of the mta, whether they are on the market for sale or not? have you done that inventory? >> on market property that is either for lease or available, there is a

commercial -- call that a listing service called cold star and loop net we all use looking for property. if we identify a property we are interested in, we go and talk to the ownership to see if there is an interest. >> that wasn't my question. have you done an inventory of every single -- it is not for prologis but broker. >> the answer is have i done an inventory of every property. no, i of course not. but i have done inventory of all the propertis that meet requirements that sfmta has and it doesn't exist. >> you can guarantee this committee that if -- >> as much as you can guarantee that you can close on a transaction. that is a very harsh use of the word guarantee. >> if i -- hold on one second. >> let me ask the question first. >> if we can have the question asked, then the answer follow. >> thank you. let me ask you the question first. let's say we go down the road and actually approve this lease, right.

can you guarantee us that in a year, two years, three years, four years that there isn't going to be a property that is sold that could have met the needs of the cities that we have -- that we did not know about if we could have approached that property owner about purchasing it. >> of course not. i don't think anyone can do that for you. >> final question for the broker. you said earlier the city can always get out because you can sublease, right? but the difference there is that if the market goes down, right, the sublease could be potentially for a lot less money than what the city is guaranteed to pay prologis, right? >> there is always that possibility in any lease. given the contraction of available space for that

kind of use, the chances are little to none that you are going to see that. in fact, today if the property was openly marketed it would bring more rent and certainly a lot more money than what was paid for it. just look at what is happening in our city on mid market street and what people are paying for buildings that sat vacant in ten years. we are in a whole new marketplace we haven't seen in ten years. >> thank you. i have a final question for the budget and legislative analyst, if i may, through the chair. mr. rose, you are here to advise the board of supervisors. we always appreciate your good work. you have listened to this discussion around whether or not there are alternatives out there. you know, you have seen the representation from the mta. we have heard the representation of the various brokers here. i mean, what is your sense? are you convinced that, in fact, this is the only alternative we have, that there isn't anything we

haven't surveyed and looked at that could end up being a better deal for the city? >> madam chair, members of the committee, supervisor campos, do i not represent ourselves to be real estate experts. however, i have heard nothing about properties -- survey question about. i don't know. does this property have to be that close to san francisco. for example, could there be properties in the east bay that would be suitable for this operation. as i understand it, this is not just for short-term towing. so i don't understand the need that this has to be very close to san francisco. i have heard nothing about properties outside of that area, other than daly city and the peninsula. or are there other properties that might be available. to answer your question specifically, i can't

conclude that this is the only available piece of property. >> thank you. >> thank you very much. why don't we open this for public comment if there are no questions at this time. are there any members of the publics who wish to speak on this item? item number 6. >> good afternoon, budget and finance. well, the budget exploded with a mighty crash as we fell into the sun. and the town was searching for some more land for the land that's on the run. land on the run. ♪ land on the run ♪ and the city budget man does the best he can ♪ and i know you'll find some land ♪ for the land on the run ♪ city land on the run ♪ and woe-woe-woe what a

budget. woe-woe-woe what a budget ♪ ♪ do you know the way to san jose. they got a lot of space. there's be a place ♪ and the bay shore is a great big freeway ♪ put on you'll get 100 down and get your car ♪ and there you are. you've got the money in a jar ♪ i know you'll go far ♪ you can really breathe in san jose ♪ you're going to find some time and give em the dime ♪ >> thank you. next speaker, please. >> that's a tough act to follow. my name is john wicker. i'm the ceo of auto return. i'm here to speak on one topic only, the working conditions down there. we strive to create world classworking facilities for our workers. our other facilities are

world-class, frankly. independent of all the budget considerations here today the working additions were unable to be up to the standards you expect. the primary reasons are two: one is the lack of running water and plumbing, which requires the use of, you know, port potties, for lack of a better term for workers and citizens that attend public auctions at that facility. number two, the facility is designated as a historical landmark, which prevents us from making improvements. i know folks have already spoken about this. but it creates basically outdoor conditions even in the buildings. so from an operational standpoint, the site is less than idea. >> thank you. next speaker. >> afternoon, my name is david rodriguez, teamsters

local 665. i'm one of the representatives that represent members at auto concern. as he said it is the working conditions of members. conditions with plumbing, conditions outside. it's raised concerns in the past. that is why we would support this -- the decision to move to another property, thank you. >> thank you. any other speakers who wish to comment on this item number 6. >> just want to take one more minute to address some of the comments that were made earlier. when you talk about virtually guaranteing that there's no this or no that in the future, you can't guarantee this billing is not going to fall down tomorrow either. just as a point of reference, prologis -- what i do for a living is talk to owners, so i could almost guarantee -- not

100% guarantee but maybe 99% guarantee that there are no other sites that fit as well as this property does. i work with a lot of the companies looking for properties as well as developers, owners and investors. i talk to property owners every day, asking if they would sell their property. when we approached the owner of 2650 bay shore initially it was no. we approached a couple months later. it was no. we approached them again. it was no. one of the reasons we were able to get prologis was able to convince the seller to sale, he also offered them a trade property. so when you are a seller of real estate, if you don't have something to trade i want, typically owners don't sell their property because they will pay a large tax on the gain. one of the ways we structured the deal to help make the sale occur, because he did not want to sell the property, was by

offering him some trade properties as an alternative to paying the taxes. that kind of sped up the whole process to allow him to consider the sale. ultimately he did trade in mot one of prologis's property but another. the timing is essential, where you have to have the cash up-front to do it. prologis picks up a lot of non-refundable moneys, ready to close on a five-day period. they brought the property all-cash, $21 million. >> thank you. thank you. are there other members of the publics who wish to speak on item number six? >> just a comment on mr. rosen's comment about east bay or other areas, one of the main revenue sources is the car division. to move to the east bay,

whether it be oakland, hayward, san lorenzo, to have towed vehicles back and forth over the bay bridge or peninsula would decimate their ability to make any money. >> thank you. any other speaker who's wish to comment on item number six? seeing none, public comment is closed. colleagues, we have the item before us. we have heard and held public comment. any thought, comments? supervisor campos. >> thank you. i don't want to belabor the point here. i think a lot of points have been made. i don't question that everyone here is trying to do what is right for the city, what's right for the workers. i want to thank the representative of workers and talked about the conditions. no one is questioning the fact that we need to move.

it is really about making the best deal we can for the city. or at least the deal that, at least on its face, doesn't look as bad as this one does. you know, i want to work with the mta. i'm just -- i'm just not there. part of the challenge -- i don't mean disrespect to the individual who's spoke, they are trying to do their job, but the question whether or not we have done our due diligence in looking at all the options available, i think that there is a role for brokers to play in these deals. i don't necessarily think that the brokerage is the best person to make that case, you know. i think there has to be an independent third party analysis on that. again, no disrespect to

individuals. they are professionals, trying to do their work. but i think there has to be a separation in terms of the different roles. when someone is close to a deal, even the best possible, the analysis on the question of surveying all options should be done by someone else. so that's part of the challenge i have. my concerns remain. >> thank you, supervisor. supervisor kim. >> i do want to appreciate the work that went into today's presentation. i want to say i think we need more time. i think the committee is honestly the best place to do that in. i know that out of respect for the mta we move things forward and allow things to be presented during that time period. i'm uncomfortable not having -- this is less about now. the other questions asked

but now to the sfmta about our real estate master plan. i want to get a sense of how this fits in in terms of larger real estate and how it fits into us operating muni at the highest level. i think we all have the same goal. you want the best possible deal so we have as much money coming to front line services as possible. more muni buses, increasing efficiencies, keeping muni fares at the lowest price. all these things come tied in together. so when we put in money to real estate i want to have a good understanding of how this fits into our overall plan so i will motion to continue for one week. i want to be very specific about what i would like to see over that week. i want to say i have the highest respect for mr. risken and ms. boes. i believe there's a lot owas do. i just need to have and

understanding of that process. myself personally to feel comfortable moving this forward to the full board. i'm trying to avoid as much as possible bringing these items that may be controversial to the full board as much as possible, if we have that time. i don't plan on doing it more than that one week. as much information as we can get on the real estate master plan, the net present value of this lease, which you said has been calculated but you didn't have the information before us today, a sense again of the process. supervisor campos said it. it is great to hear from the brokers but i would rather hear from the city and county in terms of our best interest. that is kind of what i'm looking for over the next week. i'm curious. maybe this is a separate

issue because we are not raising tow fees and lease, i'm assuming auto return will stay the same. what we are looking at there, is there consideration for increasing tow? i'm curious actually as to what our tow dollars bring to operating costs for muni. if we have the highest tow cost in the country, is that subsidizing any of our services at all? we get ton ofs of complaints about the cost of towing versus new york city, et cetera, et cetera. i have always understood it that that subsidizes some of our front-line services like muni. maybe i'm wrong about that. but if we are spending this amount on real estate, i just want to get a sense of that cost benefit analysis. >> thank you, supervisor kim. i am supportive of the continuance one week.

i thank all the folks here today. not an easy one. thank you to the brokers, prologis and mta staff for being here and answering a lot of tough questions. i think a lot of good questions were brought up. i think a lot of them are relevant to larger policy questions as to what we are doing with real estate. this is not a unique issue to the mta about how we manage real estate. how it is dealing with space needs in the future would be, including what we are doing with current assets. it is not a unique mta issue. we constantly question the report about, real estate services, the san francisco unified school district about how they are utilizing the property. this is a large issue regarding our real estate assets. that is a larger question. i don't think this committee over this topic will be able to answer that question. that is a bigger issue i think the city needs to take a look at. i want to make that comment. a lot of this was geared

about our assets. i think we deserve a larger and more thorough conversation in the future. when we talk about why it is we couldn't purchase the facility, why is it that we lost out. i know the city was in the process of doing it, trying to acquire that, from my understanding. the simple matter is we are a public agency that moves slower than some of the other entities. we have less to trade with. for example, property and other things. for these inherent reason and multiple boards, we are slower and less nimble to respond to certain deals that come up in the marketplace that happen very quickly. so i think we all need to recognize this so we can blame and point finger about mta about why didn't you pull the trigger earlier but the fact of the matter is we have a slower process, more deliberate process because we are a public entity.

i think that is an important piece to say. in terms of timing, i think that there's questions about what we can get with more time. i'm supportive of the one-week continuance because i think we need clarity around the mtas plans. especially given the fact a draft analysis has already been completed, it seems that is something that could be produced within the week. i think that is something that is reasonable to ask of the committee to get information on. if you didn't have a draft, i would say that probably would be more difficult to do. given you have it, it makes sense. do i think we would be able to get a property -- purchase a property in short order that is cheaper, probably not, given everything we are hearing. it might be possible. i don't think anyone can definitively say we cannot but at the same time it seems unlikely, given the time constraints on the port development work as well, we have a lot of things to consider. i would be supportive of the continuance. i'm very happy to hear very specific things that has

been articulated in terms of what it is this committee wants to hear about. i do think it is important for us to understand the net present value of the leases. and what that means in terms if we were to locate and find a property, frankly. we are kind of doing this exercise of what is net present value of lease amount we are putting forward. what would that mean in terms of purchase price. can we find a property at the purchase price is a whole other separate question that fits the needs we are looking for. the other thing is the master plan, i'm happy to hear about n. terms of process i know other supervisors want to hear about that. that is fine. for me it is less process but net present value and master plan more than anything. on tow fees, i think san francisco has a very, very, very high tow fee already. i know that part of the the budget analyst report has been about whether or not we are recovering enough to pay for this lease at the site. the mta gave a number of

reasons why, including that the space isn't going to be completely used by tow, et cetera. i would be very cautious about increasing the tow fee because it is sittingly high. we have seen so many folks come in with hardships to be able to come back and grab their vehicles. so i would be very concerned about that. i just want to articulate that. i will be supportive of the motion supervisor kim made. supervisor avalos. >> thank you for mentioning the tow fee too. i think we might have the highest tow fee in the country, which is not something we can actually even think about raising. yet i think our being able to make this purchase or lease viable in future years might be precluded on the tow fee. that is something i'm concerned about. i'm prepared to continue the item. i'm not sure -- i think we can get a lot of information but i don't think it is going to change

fundamentally about how i feel about this contract, this deal. it is something that i feel very uncomfortable with. i feel that, you know, we actually had, you know, some opportunity at some point. very small window of opportunity to purchase this property at something comparable to what prologis has been able to do. now we are looking at leasing for an astronomical amount of money compared to the original asking price was. that sits really poorly with me. i know -- i feel like we are a captive audience. we have incredible needs about managing our fleet and our space for the mta. and i feel like we don't have a lot of choices here, what to do. i also think if it is possible to get someone a better deal we should try and get that. i could conceivably vote against this. so in hopes we could

perhaps get a better deal. that was expressed that wasn't possible but there was no guarantee so maybe there is a possibility where there wasn't one that was anticipated. >> thank you, supervisor. so we have a motion on the floor to continue the item for one week. we can do that without objection, thank you. thank you very much. why don't we go to item one, please. >>the clerk: item number one. resolution to authorize recreation and parks department to accept and expend grant in amount of 131,041 from california department of parks and recreations for the twin peeks trail system improvements. >> thank you very much for this item. i believe we have a representative from recreation and parks. >> yes. my name is tony moran. i'm the grant writer and manager for recreation parks capital division. the item before you is a recommendation to board of

supervisors to accept and expend to have conservation fund grant for twin peaks trail project. the legislation also authorizes the director of real estate to regard a deed restriction against the trail portion of the twin peaks property for a period of 20 years. this is one of several trail grants awarded to recreation and parks department to support the 2008 clean and safe neighborhood park bond trail program. this grant will fund improvements to twin peaks trail, making the trail more accessible. reducing erosion and reducing the amount of damage to natural areas. the twin peaks trail project has completed the public outreach. that happened in fall of 2011. the conceptual plan for the improvement was approve bid the recreation and park commission in february of 2012. we expect to go into construction in fall of 2013. so in closing, i'm requesting that the committee recommend to the

board of supervisors to accept and expend to have the conservation fund grant for twin peaks trail and authorize the director of real estate to record a deed restriction on the trail portion of twin peaks property. i'm available if you have any questions. >> thank you. on this item i believe we do not have a budget analyst report so why don't we go to public comment. ♪ twin peaks road take me home ♪ to the budget bringing along ♪ and we need more budget, momma ♪ take me home, country twin peaks road ♪ twin peaks mountain high ♪ bring the budget ♪ twin peaks

mountain high ♪ bring the budget home ♪ >> thank you. are there other members of the public who wish to comment on item one. seeing none, public comment is closed. can we send this forward with recommendation? okay. we have a motion and we will do this without objection. thank you. item two. >>the clerk: item two, resolution authorizing department of environment to retroactively accept and expend grant in amount of 156,000 from california public utilities commission through pacific gas & electric to reduce and demand reduction of energy in san francisco during 2012. >> thank you. we have guilmo rodriguez from department of environment. >> thank you. guilmo rodriguez from the department. the department requests the committee's recommendation for approval of a & e item

in amount of $156,000 to support the city's energy watch program. since 2010 when the city initiated the energy watch program the departments provided about 5.2 million in incentives for over 1,600 businesses and multifamily buildings in san francisco, resulting in a savings of about $6.8 million annually for energy needs. this $156,000 is an augmentation to our current program. the contract is through the end of this calendar year. it is to support our continued specifically our out days reach program in order to get more subscribers into our overall program. again, it is our outreach services. i will take the opportunity to share with the committee that the department plans to come back in the next few weeks with an additional a & e approximately in the amount of $3 million.

there are a significant amount of interest in san francisco that we have been successful at recruiting. we turn back to the public utilities commission, pg&e requesting additional and we are close to an agreement of bringing in additional dollars to support the ongoing interest on part of property owners in san francisco. with that i am happy to answer questions. >> thank you. a question about whether the department of environment can share with us what the outreach looks like and what has resulted in terms of where people are participating. are we seeing a fairly even spread in terms of home owner participation, more concentrated in certain areas or finding areas to improve outreach? >> certainly. i can speak top line and provide the specific details. the focus on these $156,000

is to increase our target audience with new homeowners in particular. also increase our online subscribership and the bulk of these dollars to expand our multilanguage capacity to out reach to customers. as you can imagine, looking at san francisco and where the bulk of the early adopters and early subscribers to the program is concentrated in those parts of the city where we have the highest home ownership rates. again, we are looking for individual property owners that can make the decision on the program and it's always been a challenge with respect to large multiunit buildings, finding the property owners, getting them encouraged to participate in the program. but i will come back and give to the committee the specific details of where our concentration is. >> thank you. i believe we do not have a